As part of efforts to manage liquidity in Nigeria’s financial system, the Central Bank of Nigeria (CBN) has raised the Standing Deposit Facility (SDF) to 25.75 per cent
The CBN circular to all authorized dealers signed by Director financial market Department, Omolara Duke also said that the apex bank increased the Standing Lending Facility (SLF) to 31.75 per cent as approved at the last monetary policy committee meeting.
The CBN revised the Asymmetric Corridor around the Monetary Policy Rate (MPR) from +100/-300 basis points (bps) to +500/-100 basis points.
This significant shift aims to discourage banks from holding excess liquidity at the central bank and to promote increased lending activities.
According to the circular, Commercial and Merchant Banks will receive 25.75 per cent on deposits up to N3.00 billion, while deposits exceeding this amount will attract a lower rate of 19.00 per cent.
Payment Service Banks will receive 25.75 per cent on deposits up to N1.50 billion, with amounts above this threshold earning 19.00 per cent.
The circular further said that the new rates are effective immediately, with all authorized dealers expected to adhere to the updated guidelines.
On the SLF, the CBN said the MPC adjusted the upper corridor of the standing facilities to 5.0 per cent from 1.0 per cent around the MPR.
Consequently, it said the suspension of SLF is hereby lifted, directing authorised dealers to send their request for SLF through Scripless securities settlement system (S4) within the operating hours of 5 pm and 6.30 pm.
According to the circular, authorised dealers are permitted to access the SLF at 31.75 per cent while a 5 per cent penalty as stated in the S4 business rule is retained for participants that do not settle intraday liquidity facility (ILF) which the system will convert to SLF at the rate of 36.75 per cent.
It however said that the collateral execution, the rediscounting of instruments pledged by participants at the penal rate by the CBN is reintroduced as stipulated in the approved repo guidelines.